The legislation imposes requirements on PBMs to reimburse contracted pharmacies at rates that meet or exceed their acquisition costs for prescription drugs. It also establishes a framework for how independent pharmacies are reimbursed, mandating that they should not receive a payment lower than their cost of acquiring the drugs, which is designed to support the viability of independent pharmacies against larger networked establishments. By placing these mandates, the bill aims to balance the competitive landscape between independent and contracted pharmacies, emphasizing fair compensation practices.
Summary
Senate Bill S3842, known as the 'Patient and Provider Protection Act', is a legislative effort focused on regulating the activities of pharmacy benefits managers (PBMs) in relation to their contracts with pharmacies and drug manufacturers. The primary objective of this bill is to ensure that PBMs operate with a fiduciary duty to prioritize the long-term health outcomes of covered persons, thereby enhancing accountability and transparency within pharmaceutical practices. Additionally, the bill prohibits PBMs from engaging in misleading marketing practices aimed at persuading patients to select certain pharmacies over others, particularly network or contracted pharmacies.
Contention
While the bill promotes consumer interests and aims to protect independent pharmacies, it may face opposition from PBMs and larger pharmacy chains that could argue that increased regulations could result in higher drug prices overall. Supporters advocate that such reforms will lead to better healthcare outcomes and improved access to medications for consumers. The contention may revolve around the extent of regulatory oversight that is deemed necessary for effective management against the operational freedom typically enjoyed by PBMs.
Additional_points
The act asserts that agreements between PBMs and manufacturers that condition rebates on the exclusion of generic drugs are invalid, promoting the use of generics. Furthermore, it stipulates that disputes in contracts with PBMs should be treated as contracts of adhesion, allowing courts to scrutinize their fairness. This legal framework is intended to protect consumers from potentially exploitative practices.
Requires third-party discounts and payments for individuals covered by health benefits plans to apply to copayments, coinsurance, deductibles, or other out-of-pocket costs for covered benefits.
Requires third-party discounts and payments for individuals covered by health benefits plans to apply to copayments, coinsurance, deductibles, or other out-of-pocket costs for covered benefits.
Authorizes use of healthcare platforms providing discounted prices for payment of prescription and non-prescription drugs or devices and for telehealth and telemedicine services.
Insurance: other; an enrollee's defined cost sharing for prescription drugs; provide for. Amends secs. 5, 7 & 9 of 2022 PA 11 (MCL 550.815 et seq.) & adds sec. 10.
Relating to certain contracts between pharmacy benefit managers and the Employees Retirement System of Texas, the Teacher Retirement System of Texas, The Texas A&M University System, or The University of Texas System.
Relating to certain contracts between pharmacy benefit managers and the Employees Retirement System of Texas, the Teacher Retirement System of Texas, The Texas A&M University System, or The University of Texas System.